Business Loan Option Blog

Starting a business takes a lot of preparation and emotional support from the people around you.  It is more than just securing a business loan and purchasing a product line in the hopes that people will purchase the items from you.  It is a commitment, one that can turn into a life long one.  Extroverted people are great salespeople, but even if you are introverted you can start and run your own successful business.  But before you sign any dotted lines and make sure all of your contracts are filled out to the last crossed ‘t’, you need to be aware of what you are in for when you start your own business. 

The first thing any successful business owner must have is the support of their family.  Starting a business takes up 80 to 100 hours of your time a week and there is very little time left for vacations and spending time with your loved ones.  Many entrepreneurs do make it a point to vacation with their families but they tend to also check in with their companies.  While it is hard for the family of an entrepreneur to understand the long hours you will have to put in, they will reap the benefits of your hard work in the long run.  Be prepared to sacrifice some of that family time to get your company off of the ground. 

While having money is great it is not the end all be all of a great company.  You can be wealthy by having a successful company and not have a lot of money.  The less tangible rewards of owning your own business is what it is all about.  You will have respect, independence and a sense of pride for building your company from the ground up.  It is hard work to make your business grow but money should not be the only motivation you have.  Paying off your business loans needs to mean more than just handing the money to your financier every month.  It should be a joy and not a chore. 

You have to be passionate about your business and the idea you are bringing to the world.  You will know how important it is to you because it will encompass your life.  Take that passion and infect everyone around you with it so that you can bring your dream of running your own business to life.  If others believe in you then you can make your dream a reality.  Remember though to be patient during this process.  Sometimes it can get frustrating, especially when things do not move in the direction you want or as fast as you want.  Take a step back and a deep breath and then move forward once again. 

Pragmatic business owners do better than ones that just keep banging their heads against the wall.  They know that sometimes you have to just give up on an idea and move on to something else.  Sometimes the timing of starting a new business is not right.  Instead of putting yourself thousands of dollars in debt trying to run a business that is not going anywhere, cut your losses and try it again at another time.  This does not mean you’re a failure at running a business.  This means you know when to stop when things are not right. 

While being pragmatic you also have to be willing to take a risk and starting your own business is taking a risk.  Most entrepreneurs and business owners are risk takers, and even though they know they could fail they don’t let their dreams pass them by.  You have to be willing to risk everything while working hard to make your business work.  From the start work in some protections for yourself in your business plan in case things don’t work the way you hope.  But don’t let failure stop you from trying. 

Finally, run your business as ethically as possible.  No one will work with a business that is dishonest or shady.  Be upfront and build a report up with future customers based on transparency and honesty.  You will find that customers will respect this and talk about you and your business to their friends, building more trust and a larger customer base.

As a business owner you probably developed a business plan when you first started your company.  In the plan you included what your business was about, how you were going to fund it – whether through business loans or from your own capital – who your customers were going to be and what you are providing your customers.  But sometimes it is necessary to reevaluate your business plan and update it.

When your business grows there are occasions when your business plan will need to be updated and changed.  It may not be something you immediately think of but it must be considered.  There are seven good reasons why you should update your business plan, and if any one of these reasons applies to your business you better pull out the original business plan you are working with and review it.

If your business is about to go into a new financial period, you should update your business plan.  A new financial period could happen annually, quarterly or even monthly depending on the type of business you own and the speed in the change of the market.  It’s a good idea to review your plan even if you do not update it at this time.

If you find that you need to pursue additional financing for your business – or even are looking into any type of initial loans for business – you should review your business plan to make sure it is up to date.  You will be asked by potential lenders to see your plan as it will help them make a decision about whether they want to risk giving you a loan.

If the market your business is a part of has changed drastically, you need to update your business plan.  Your customer’s tastes will change from time to time and you may need to look at the overall change in trends to see if consolidation has happened through your customers.  Additionally, regulatory changes may trigger the need to change your business plan.

If your business is working on developing a new technology, product, skill or service you need to look at your business plan.  The current plan may not cover the new things you have or are planning to add to it.  Additionally, if your business has dramatically changed in any way you should reevaluate your business plan.

Has there been a change in your management structure?  If there has you need to update your business plan to accommodate the change and to provide you current staff with new information about where you want to take your business and the goals you have in place.

Major milestones are another reason to update your business plan.  For example, if you have moved from a home office to rented space, employed a milestone employee or have crossed a certain sales mark you need to review and update your plan to include these milestones.

Finally, if your old plan simply does not reflect your business and current goals it is time to update it.  Things can change quickly and make your original plan irrelevant.  Maybe you were not sure of what you were doing when you first wrote it.  You need to sit down and look over the plan and update it to reflect your current situation.

Because business plans have a lot of common elements in them – like cash flow projections and marketing plans – you need to look at these elements first as they will be the easiest parts of the plan to change.  You will also want to review your plan to ensure that you have allotted for company growth.  You may find that the type of business plan you utilized when you first developed it may no longer work.  When this happens, you should consider a different type of business plan to try.

Keeping your business plan updated will allow you to better gauge whether or not you are meeting the goals you set forth for your company.  Many business people do not take into consideration that their business will change as it grows and never think about looking at their business plan.  Hopefully these tips will help you grow your business and you will remember to review and update your business plan on a regular basis.

When you first start working on the details of your new business you should develop a business plan that can help you set your goals and give you a roadmap to follow.  This plan should include everything, from the type of customers you are targeting with your products and services to the types of business loans you are going to pursue for financing.  How detailed your plan is will be dependent on the type of business you are going to run.

In order to develop a business plan you need to know what types of plans are available to you.  There are four types of business plans that you can utilize and they can be long or short, simple or detailed.  They all take a varying degree of effort to put together but they all work the same.  They provide you with a roadmap for your company and your goals.

The miniplan is a business plan that ranges from one to ten pages.  They are a basic outline of your business and they cover key points such as your financing needs, business concept, marketing plan and financial statement.  This last item should include at a minimum your current cash flow, your income projection and your current balance sheet.  This type of plan is best to help you test out your overall business concept and to measure the interest of a business partner or minor investor.  It is also a good outline for a much more in depth business plan that you prepare later down the line. 

However, if you use a miniplan remember that it is designed to be an outline and not a full-length business plan.  Major investors are going to want more information on the business you are proposing, which is why you must prepare a full plan before meeting with anyone you hope will invest in your company. 

The working plan, the second type of business plan, is one that is used as a tool to operating your business.  It should be a short presentation but it should also have a lot of detail in it.  This plan is informal compared to a full plan and it is designed solely for internal business use.  You would not want to present this to an investor because many major elements that they would be interested in are omitted from this plan.  You do not need appendices or photos with this type of plan. 

How the plan is finished is also something that is not a major concern with a working business plan.  You can keep this plan in a three ring binder with coffee stains on the sheets if you want to.  You should make sure that your financial statements in this plan are complete but you do not have to worry about whether or not numbers are scratched out and handwritten in.   

The presentation plan is a working plan that has had all of the typos corrected and has been dressed up to show someone outside the company.  You can use the presentation plan for investors and bankers who may be interested in financing your company.  All of the information in this plan is the same as that of the working plan.  You simply need to clean up the language and the way it is packaged to make it appealing to outsiders. 

You will need to add a few things to your presentation plan.  Investors will be looking for competition information and a risk assessment.  These plans should also have included in them color graphs and photos that are pertinent to the information you are presenting.  All of your typos should be fixed up and all of your information – especially your financial numbers – should be accurate and consistent.  You do not want to skimp on these details because they are the ones your investors will be looking at. 

Finally, the electronic plan is the business plan most companies use.  They are composed on the computer and then printed off on high quality paper with color prints for hard copy presentation.  However, an electronic plan makes it easy for you to transfer the document to an interested party across the country.  You will be able to e-mail this plan to investors as well as use it in computer presentations for investors who have the need to tear apart your spreadsheets. 
 
 

A business plan is a must for just about every business.  It is the basis of your businesses goals and plans, and it will help you keep to the task at hand when you build your business from the ground up.  A business plan is basically a written description of your business and its future, and if you plan on securing business loans to help you get off the ground you may need to furnish this plan in order to convince lenders you are worth the risk.  While there are considerably more elements involved you could basically write a paragraph down on the back of a napkin in McDonald’s and have the very start of your business plan. 

A business plan can help everyone involved in your business and it can be used to give people tasks that need to be accomplished towards getting your business launched.  As mentioned they can be used to procure business loans but they can also be used to help attract key employees for your company, prospects for additional business, supplier contracts or a way for other businesses to understand how you manage your company.  It really is an important document that will be used from the very day your business doors open to the day they close – hopefully many years down the line. 

In order to develop a business plan you need to know what they contain and how to put one together.  Business plans should contain your goals for your company, what you will do to reach those goals, problems that your company may face and how you intend to deal with the problems, the organizational structure of your company with titles and the associated responsibilities of each and how much capital is going to be needed to keep your company going until it is functioning in the black on a consistent basis. 

With these items in mind you want to include in your business plan the following three parts which are standard in all business plans:

The business concept – this is the first part of your business plan and it will talk about the industry market you will be entering with your business, how your business will be structured, what you will be selling or the service you are offering, and how you intend to make your business successful.

The marketplace section – in the second section of your business plan you will need to discuss who your potential customers are, why they buy the things they do, who your competition will be and the strategies you plan to put in place to help you win the customers over your competition.

The financial section – the last part of your business will include your income information including your cash flow statement, balance sheet, and other income related topics including analysis of when you will break even.  If you have an accountant they can help you with the information you will need.

Once you have the information for the three main sections of your business plan it can then be broken down in the following components for easier layout: executive summary; business description; market strategies; competitive analyses; design and development plan; operations and management plan; and financial factors.  The whole plan should be finalized with a cover, title page, and table of contents for a professional presentation.  Remember you are giving these to potential clients, partners, and financiers. 

You are probably wondering how long this plan is going to be considering the amount of information you need to cover.  Between fifteen and twenty pages is how long the standard business plan runs but it can be as long and as detailed as you want or as brief and vague as you want.  It is all going to depend on the type of business you are proposing.  If the business is new, you may have a longer plan that most because of the complex details you are conveying about your business.

The length will really be determined on how you intend to use the plan.  If it is a business development tool that will be distributed to outsiders then you may need to make it detailed.  If it is going to simply be used in house for managing your business then a shorter version is acceptable.